Thebe Investment Corporation is set to gear up in BEE deal
Thebe Investment Corporation, the country's oldest BEE company, announced yesterday that it would buy a 15 percent stake in Combined Motor Holdings (CMH) for R294million, to take advantage of the massive growth seen in the motor industry.
Thebe chairman Vusi Khanyile said that the two companies had been in talks about the deal for "quite some time".
CMH is a car-hire and new and used car retail company listed on the JSE with yearly profits of R140million. It owns dealerships in cities across the country and car-hire outlets at all major airports.
Thebe has operated as a private BEE investment company since 1992 and has interests in financial services, insurance, healthcare and tourism.
"We have been in partnership with CMH for three years, where we established commercial ties through the car-hire division and have developed a strong relationship with its senior executives," said Khanyile.
CMH chief executive Jebb McIntosh said that the company had, over the years, been successful in introducing black shareholders into selected operating units and that Thebe marked its first endeavour to carry this into the group structure.
But CMH said that shareholders would still have to approve the transaction, which would take place at a meeting in December. Thebe announced that it would fund R20million of the total acquisition using its own resources, and R150million would be secured by externally-funded preference shares and the remaining R124million by CMH-funded preference shares.
Aside from providing the company with empowerment credentials, Khanyile said that Thebe's role in the company would be as an active shareholder, providing strategic direction in how the company could better target the emerging black market.
"We are an involved minority shareholder. Though there is no change in control, we are not just an absent parent," said Khanyile.
Thebe's dividend income from all its investments is placed in a trust to benefit previously disadvantaged South Africans.
"The Batho Batho Trust, which is the majority shareholder of Thebe, is a broad-based trust set up to benefit historically disadvantaged communities and to support transformation," said Khanyile.